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2019 (2) TMI 359 - AT - Income TaxPenalty u/s 271(1)(c) - Discrepancy or deficiency in the closing stock of the assessee - benefit of the higher valuation of closing stock by revising its opening stock of the subsequent year - Held that:- We find that in Form No. 3CD the assessee in column No. 14(a) has specified the method of valuation of closing stock employed during the year “gem stones at cost and foodgrains at market price”. Since, closing stock of foodgrains were valued at market price, therefore, there was no question of adopting the FIFO method for the purpose of valuation. Further, the AO has not pointed out any inconsistency in the method adopted by the assessee in comparison to the earlier years and in the subsequent years. Thus, once the assessee has been consistently valuing its closing stock of foodgrains (Dal) at market price then, effect it will be Revenue neutral as the closing stock of preceding year is taken as opening stock of the subsequent year. Apart from applying a different method the AO did not find any other discrepancy or deficiency in the closing stock of the assessee. The assessee before us has also not taken the benefit of the higher valuation of closing stock by revising its opening stock of the subsequent year, therefore, the addition made by the AO in the year under consideration will not ipso facto amount to furnishing of inaccurate of income or concealment of particulars of income. Even otherwise when it is a regular and consistent method applied by the assessee and not a case of any change of method for valuation of closing stock during the year under consideration then, the mere addition on account of valuation of closing stock by adopting a different method will not attract the penalty U/s 271(1)(c) of the Act. - Decided in favour of assessee.
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